Sales enablement

Why SaaS Companies Should Leverage a Product-Led Growth Strategy

May 09, 2022 - 6 min read
product led growth

We’ve discussed the merits of a product-led growth strategy at a high-level in the past. It’s a powerful tool for sales enablement regardless of your industry or sector. But where it really shines is when it’s applied within the context of a software-as-a-service (SaaS) company.

You’ve probably heard at least some of the buzz to that effect. People have been championing the merits of this product delivery strategy for quite some time now. Discussing how, when compared to other sales enablement strategies, it improves margins, reduces time to value, boosts engagement and retention, and improves the overall user experience.

But is there something to those claims, or are they simply blowing smoke? To answer that question, we’re going to need to revisit what product-led growth is, including its origins and how it differs from other growth strategies. More importantly, we’ll need to examine why SaaS products are so compatible with product growth strategies.

What is Product-Led Growth?

Before we dive deeper, let’s start with a quick refresher. Product-led growth is just what it sounds like — it’s a strategy for growing your business in which the primary growth driver is your product. The entire approach centers on positioning the product as the champion of your brand, leveraging its features and functionality for everything from sales enablement to marketing.

What exactly is unique about that, though? As a software vendor, isn’t your product the focal point of marketing and growth strategies anyway? What is this beyond just another buzzword choking up your news and social feeds?

What it boils down to is how you approach lead generation and acquisition. Traditional growth strategies put the power entirely in the hands of sales and marketing. They’re the ones who decide where, when, and how to reach out to leads, and they’re the ones that brainstorm the best approach to bring in new sales.

Product-led growth turns this on its head. Development and engineering teams take a more active role in customer outreach, which is focused on the user’s needs above all else. The idea is that rather than having people jump through the typical sales and marketing hoops, customers can experience the value of a product as quickly as possible.

Circling back to our initial point, product-led growth has been experiencing a surge in popularity amongst SaaS vendors. There are countless examples of successful product-led strategies in that space — Zoom, Slack, and Microsoft Teams, to name just a few. Why exactly is this the case, though?

What is it about the SaaS space that makes it so well-suited for a product-led approach?

Why a Product-Led Growth Marketing Strategy Works So Well With SaaS

Consider the sales cycle for a traditional enterprise software product. Typically, you’re looking at a concerted effort taking place over seven months or more. The average sales cycle of a SaaS product, meanwhile, is 84 days.

But one could argue that even 84 days is too long. SaaS companies are at their best when they can reduce their sales cycle and time to market as much as possible. A product-led strategy allows a business to do precisely that, allowing prospective buyers to directly experience the software and its value even prior to onboarding.

There’s also the fact that buyers in both the B2B and B2C space are more skeptical of marketing and sales messages than ever before — per Hubspot, a paltry 3% of people consider salespeople to be trustworthy. This means that no matter how compellingly your sales team tries to communicate the value of your software, many people are unlikely to listen. But do you know what they will respond to?


With product-led marketing, you don’t simply dictate the value of a product to your audience. You allow them to see that value firsthand. The salesperson becomes less of an advocate than a guide, there to answer any questions or address any concerns a prospect has during a proof of concept.

A product-led approach is also incredibly effective at identifying what works and what doesn’t about a SaaS solution. If there are obvious bottlenecks or usability issues with your software, most prospects won’t even make it past the initial POC. If you’re going to succeed here, there cannot be any doubts as to its effectiveness — it needs to be both excellent and engaging right out the door.

Finally, adopting a product-led strategy may also enable your business to move beyond the traditional sales funnel and towards something Hubspot refers to as the flywheel. The idea is that by providing an excellent customer experience from beginning to end, you don’t just create customers. You create advocates who are willing to actively promote your business to other prospects.

And because your growth strategy positions the product and its value front-and-center, it’s significantly easier for them to achieve this.

So, to summarize, a product-first SaaS strategy:

  • Shortens the sales cycle
  • Creates credibility
  • Generates engagement
  • Provides product insights
  • Ultimately creates passionate product champions

Product-Led Growth vs. Sales-Led Growth vs. Marketing-Led Growth

It’s important to note that the alternatives to product-led growth have their own merits, as well. What’s more, neither sales-led growth nor marketing-led growth are mutually exclusive, either with one another or with product-led growth. Your business could very well adopt a multifaceted growth strategy that incorporates all three — some might even make the argument that you should. 

To expand on the comparison from our previous piece, let’s take a quick look at the benefits and drawbacks of each approach.

Sales-Led Growth

Sales-led growth is primarily focused on generating and capturing qualified leads. Your salespeople are in the driver’s seat. Whether or not your company successfully scales is often entirely in their hands.

On the one hand, this can be beneficial for lesser-known early-stage companies that haven’t yet figured out their product-market fit, and the right sales team can easily send your business into the stratosphere. On the other, because it’s focused so narrowly on the sales funnel, it can cause your business to place less of a priority on a positive customer experience. Sales-led growth also tends to be quite costly, as more people need to be involved in the process.

Marketing-Led Growth

Marketing-led growth is all about bringing in leads and growing your brand through content. It leverages search engine optimization, inbound marketing, and paid advertising to bring in qualified leads and convince them to make a purchase. It’s similar to sales-led growth in a lot of ways, with the primary difference being that it’s your marketing team that bears responsibility for your success.

Marketing-led growth is overall less expensive than sales-led growth, and is an excellent option for short-term customer acquisition. It’s also quite agile, allowing you to rapidly test, assess, and iterate on both your product and your marketing messages. The main issue with marketing-led growth is that it’s strictly top-of-funnel, with little focus on long-term sales, deeper product engagement, or customer retention.

Product-Led Growth

Product-led growth uses your product as the centerpiece of your growth strategy. This allows you to take a more holistic approach to the customer journey, accounting for everything from consideration to long-term retention. It also promotes alignment and collaboration between all the stakeholders in your sales cycle, including sales, marketing, customer support, and product development.

Finally, it tends to be quite cost-effective while also promoting both innovation and the customer experience. Even this approach is not without its drawbacks, however. Without proper integration between teams, a product-led strategy could easily result in crippling communication silos, while also causing you to ignore other important factors such as branding.

Best Practices for Adopting a Product-Led SaaS Strategy

Now that we’ve established the importance of a product-first strategy for your SaaS company, only one question remains. What steps should one take to incorporate such an approach? Per the product-led blog, the key elements of product-led growth are as follows:

  • Define your key performance indicator: When evaluating the success of your overall strategy, what metrics will you use? How will you assess whether or not your strategy truly creates value for your customers? 
  • Authenticity and transparency: Because product-led growth prioritizes the user, it should go without saying that both your pricing and your messaging must be as transparent as possible, lest you lose your audience’s trust.
  • Consider a freemium approach:  By offering a free product demo or a basic tier that users can access for free, you can get people hooked and then gently nudge them into paying for deeper integration or more advanced people.
  • Create a flywheel: Focus on how you can make your software go viral — how can you inspire your existing customers to share it with new prospects?
  • The experience is everything: From onboarding to outcome, everything about how your prospects interact with your product should be seamless, intuitive, and enjoyable. Onboarding is crucial here too, as a product that’s difficult to learn will likely alienate a large portion of your prospects.
  • Focus on the moment of value: At what point do your customers tend to realize your software will give them what they need? That’s the moment of value, and your entire strategy must focus on getting them to that point as soon as possible.
  • Don’t forget about retention: Your product should add value over time, be easy to expand and extend, and be business-critical for clients. But more importantly, it should be useful enough that people don’t want to switch.
  • Create and maintain a product roadmap: You’ve probably surmised that product-led growth, being a multidisciplinary strategy, requires a great deal of planning. A roadmap will help you conceptualize this, ensuring that the different teams and stakeholders are aligned in their approach and their efforts.

CloudShare Provides the Tools You Need for a Product-Led Strategy

Given the importance of experience and onboarding, product-led growth demands that you provide exceptional product demos and training.

CloudShare can help! With our next-generation software platform, you can create engaging, interactive sales experiences for every stage of the buyer’s journey.

Get in touch to learn more